Road To Billions: Here's How Steve Ballmer Made His $79.7 Billion Fortune
There are almost 8 billion people in the world and of that number, only about 3000 people are billionaires. The people who fall in the category of billionaires earn their wealth by doing many things. While some are entrepreneurs, some inherited their wealth and invested their inheritance in profitable ventures. While the source of billionaires’ wealth varies by who they are, one thing is constant. They have never stopped trying to make more money. While some of them may not actively chase riches anymore, the financial decisions they made years ago still earn them a lot of money. In this piece, we peek into the billionaires’ world to take a walk in the life of one of them, Steve Ballmer. Join us as we examine Steve’s career and how he was able to amass a net worth of $79.7 billion.
Born in Detroit, Michigan on the 24th day of March 1956 to Beatrice Dvorkin and Frederic Henry Ballmer who was at that time a manager at the Ford Motor Company, Steve Ballmer grew up in Farmington Hills, Michigan, and moved to Brussels in 1964 where he attended the International School of Brussels. He proceeded to Lawrence Technological University in 1973 where he took college prep and engineering classes. He also attended the Detroit Country Day School, Beverly Hills where he graduated as a valedictorian and National Merit Scholar. He would later gain admission to Harvard University where alongside studying, he managed the Harvard Crimson football team and was a member of the Fox Club. He also worked at the Harvard Crimson newspaper and the Harvard Advocate while living very close to Bill Gates who he would later outscore in the William Lowell Putnam Mathematical Competition which was sponsored by the Mathematical Association of America. He graduated with honors in 1977, earning a Bachelor of Arts in applied mathematics and economics. Upon graduation, Steve started working as an assistant product manager at Procter & Gamble. He did that for two years and at some point, he shared an office with Jeff Immelt who would later become the CEO of General Electric. Steve also attended the Stanford Graduate School of Business for his MBA but dropped out in 1980 to join the Microsoft startup. He married Connie Snyder in 1990 and their marriage was blessed with three children. Now that we are familiar with Steve Ballmer, let us take a look at the things he did to become a billionaire.
In June 1980, Steve Ballmer joined Microsoft as the first business manager hired by Bill Gates and the 30th employee of the company. He started with a $50,000 salary and a 5-10 percent stake in the company. By the time Microsoft got incorporated in 1981, Ballmer owned 8 percent of the company. He would later sell 39.3 million Microsoft shares in 2003 which amounted to $955 million at that time. The sale of his shares reduced his stake in Microsoft to 4 percent.
During his years at Microsoft, he served in many capacities across several Microsoft divisions such as operations, operating systems development, sales, and support. He became the Executive Vice President, Sales and Support in 1992, a position he held until July 1998 when he became the president of Microsoft, answerable only to the chairman and CEO, Bill Gates.
Steve Ballmer became the chief executive officer of Microsoft in January 2000, handling the company’s finances and operations while Bill Gates retained his position as the chairman and chief software architect. Bill Gates later stepped down from his position as Chief Software Architect in 2006, a move that afforded Ballmer the autonomy required to take some management steps in the company. He orchestrated the acquisition of Skype and other software. During his tenure as CEO, although Microsoft’s share price was stagnant, the company made a great increase in annual revenue.
Its net income increased by 215 percent and its gross profit was double what Google and IBM made. While he made a lot of money for Microsoft, Ballmer was greatly criticized for not keeping up with technological evolutions in terms of smartphones, tablet computing, smart cars, and music players which gave other companies such as Apple and Google an edge over the company. In an effort to work on this, Microsoft, led by Ballmer unveiled Microsoft Surface, a tablet. This was followed by the acquisition of Nokia’s mobile phone division which was Microsoft’s last acquisition with Ballmer as CEO. Ballmer retired as Microsoft’s CEO in 2014 and was replaced by Satya Nadella.
Although Steve Ballmer is one of the very few individuals who became billionaires from the stock options they received as employees in companies they didn’t own, he has made several other investments and owned shares in many other establishments. One such investment is Ballmer’s purchase of the Los Angeles Clippers, the Los Angeles-based basketball team which was announced in September 2014 after a California court ruled that Shelly Sterling could sell the team. He also purchased The Forum in March 2020 and was voted as the best owner in basketball based on a The Athletic survey in December 2020. In 2015, Ballmer bought a 4-percent stake in Twitter, the microblogging website. Years later that stake would be worth billions of dollars. With this information, you now know what to say when someone asks you about the source of Steve Ballmer’s wealth.
Sources: Bloomberg, Forbes, and Clutch Points.
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